Trend-Spotting

Kiosks may be no larger than an in-line store's window, but
that hasn't prevented entrepreneurs from making the best out of
a small situation. Also referred to as specialty retail stores and
carts, these 40-square-foot stores reflect today's trends,
offering items ranging from beauty products to East Asian hermit
crabs. Currently valued at $10 billion, the kiosk industry offers
appealing low-risk opportunities. However, to determine profitable
ways to use this limited space, you should first consider what
today's consumers really want.

As consumers search for comfort in the familiar, items such as
vintage prints, furniture, jewelry and ladylike handbags will
become popular. Even retro candy is making a comeback. The National
Confectioners Association reports that nostalgic candy is an
expanding niche in the U.S. candy market. "Every time the
economy suffers, customers are drawn to items that remind them of
the good old days," says Davis. "What's old is new
again."

What Goes Up Tends to Come Down

As new trends emerge, others fade. Most notable is the
detrimental impact that discount retailers are having on industries
such as the toy and candle markets. Competing against discounters
who are able to buy in bulk and offer similar products at lower
prices, independent kiosk operators are having difficulty keeping
up. Says Davis, "You can't sell an item that the mass
market can beat by half the price."

Davis also cautions against starting a kiosk for body jewelry or
Italian charms, which have become outdated and require large
amounts of inventory.

Making a Lasting Impression

Trendy concepts are helpful in bringing about a kiosk's
initial success, but it's only with continual improvements to
the kiosk and alterations to the inventory that you can create
long-term success. "A big mistake that new entrepreneurs
[make] all the time is to open up with a hot product and expect it
to be hot forever," says Davis. With the exception of certain
categories such as health and beauty, most trends will last about
six to 18 months.

A surprising example of a trendy but enduring concept is hermit
crabs. Operators of these kiosks have kept customers coming back
for more by adding heaters, fountains and elaborate crab homes to
their product lines.

Davis also stresses the importance of transforming the buying
process into an experience. "It has to be more than picking up
a [hermit crab] and putting it in a bag," she says.
"Customers have to feel they're part of the process. There
has to be an emotional [side to the] purchase."

Popular trends and concepts may change with the ebb and flow of
customers, but as long as kiosk owners are ready to move with the
current, they can stay afloat. "We are willing to re-invent
ourselves," says Davis. "We're willing to sell hair
[products] one day and hermit crabs the next."